Don’t get hit with extra bank fees. Get the lowdown on overdraft fees and learn how to avoid them with these easy 10 tips and strategies.
Overdraft fees can add up quickly, especially if you’re living paycheck-to-paycheck, so it’s important to know how to avoid them. Here are 10 must-know tips and strategies to help you stay on top of your bank account balance and keep overdraft fees at bay.
Know your Balance and Track Transaction History
Knowing your balance and keeping track of recent transactions is key to preventing overdraft fees. Check your bank statement at least once a week to ensure that all of your purchases are being accurately reflected in the account balance. It’s also important to check your account activity regularly to catch any fraudulent activity or overcharges before they trigger an overdraft penalty.
If you know how much balance you have in your account at any given time and actively review your transactions as they happen, then you’ll be much more likely to avoid overdrafts. Make sure to keep an eye on all of the purchases that are debited from your account, including those that are made online or through automatic bill pay. Additionally, it’s a good idea to set up balance alerts to receive regular notifications when your account balance drops below a certain threshold. Taking these steps will ensure that you are aware of your financial situation and can take action if necessary to avoid any costly overdraft fees.
Sign Up for an Overdraft Alert System
|01/02/2023||Grocery store purchase||950|
|01/05/2023||Alert: Balance below $500||400||Yes|
|01/06/2023||Transfer from Savings account||900|
Most banks and credit unions offer overdraft alert systems for customers to avoid overdraft fees. These systems can be set up to alert you when your account balance dips below a certain level, or if it drops over a specific threshold. You can choose to receive alerts through email, text message or both. This way, you’ll know in advance if you do need to transfer funds or make adjustments with upcoming payments so that you can avoid an unexpected fee.
Link Transaction to Savings or Checking Account
When you link a checking account to your savings account, the bank automatically moves funds between accounts as needed when you overdraw on your checking account. This way, your bills get paid, debit card purchases go through and checks clear—all without an overdraft fee. Plus, move excess funds in the opposite direction to maximize your earnings and protect yourself from overdraft fees.
Utilize Overdraft Protection Plans (how to avoid overdraft fees)
To protect yourself from unexpected overdraft fees, you can sign up for an overdraft protection plan. With a plan in place, your bank will transfer money from your linked savings account to cover any expenses that may hit your account when you don’t have enough to cover them. That way, excessive fees won’t be charged and your bills stay paid on time.
|Date||Description||Checking Account||Overdraft Protection|
|01/02/2023||Grocery store purchase||-50|
|01/05/2023||Overdraft protection plan used||-200||Yes|
|01/06/2023||Overdraft fee charged||-35|
- In the “Date” column, record the date of each transaction.
- In the “Description” column, record a brief description of each transaction (e.g. “grocery store purchase” or “salary deposit”).
- In the “Checking Account” column, record the transaction amount that affects the checking account. Positive numbers indicate deposit and negative numbers indicate withdrawal
- In the “Overdraft Protection” column, record if you used the overdraft protection plan provided by your bank.
By keeping track of your account balance and utilizing overdraft protection plans in a table like this, you can easily see how often you are using the plan and how much it is costing you. This will help you make informed decisions about whether to continue using the plan or to take other steps to avoid over-drafting in the future.
Make Use of Technology (how to avoid overdraft fees)
Technology has made it easier than ever to avoid overdraft fees. Many banks now offer mobile apps or online banking services that allow you to keep an eye on your balance in real-time and make transfers as needed. Keeping a close eye on your account balance will help you stay ahead of any potential negative balance situations, and makes it easy to transfer funds into checking accounts as soon as possible.
|01/02/2023||Grocery store purchase||950||Mobile Banking App|
|01/03/2023||Salary deposit||2450||Online Banking|
|01/04/2023||Rent payment||1450||Automatic Bill Payment|
|01/05/2023||Alert: Balance below $500||400||SMS Alert|
|01/06/2023||Transfer from Savings account||900||Mobile Banking App|
By keeping track of your account balance and technology used in a table like this, you can easily see which technology is helpful in managing your finances and how it is impacting your account balance. This will help you make informed decisions about how to best use technology to manage your finances and avoid over-drafting.
How to avoid overdraft fees: 10 additional tips and strategies
- Understand your account’s terms and conditions, including the daily balance required to avoid an overdraft fee.
- Keep track of your account balance, and check it frequently.
- Set up account alerts to notify you of low balances or when a certain transaction occurs.
- Make sure to budget for bills and other regular expenses.
- Use online banking tools to view your account balance and transaction history.
- Use a check register to keep track of all checks, debit card transactions, and automatic payments.
- Use a debit card instead of writing checks, as it is easier to track your spending and avoid over-drafting.
- Consider signing up for overdraft protection, which automatically transfers money from a savings account to cover insufficient funds.
- Avoid using your account for ATM withdrawals if you suspect you may be close to over-drafting.
- If you do overdraft, and want to avoid future fees, you can talk to your bank and ask for a fee waiver or negotiate a payment plan.
In conclusion, avoiding overdraft fees requires a combination of understanding your account’s terms and conditions, keeping track of your account balance and transaction history, budgeting for bills and regular expenses, and utilizing technology and tools such as online banking, account alerts, and overdraft protection plans. By following these tips and strategies, you can stay on top of your account balance and avoid costly overdraft fees.
Yes, U.S. Bank can review your account each business day and may waive the Overdraft Paid Fee(s). Your available balance must be $0 or more (excluding earlier fees and including same day deposits) for them to waive the fees. The review will take place at 11 p.m. ET on that same day.
Apply the Decline All overdraft setting to your account. It’s a great way to protect your bank balance, as transactions will be automatically declined or returned if you don’t have enough money in the account when it’s processed. Plus, no more fees charged – win-win!
U.S. Bank does not charge an Overdraft Paid Fee on items of $5 or less and when the Available Balance at the end of the business day is negative by no more than $50. They will, however, charge up to a daily maximum of four (4) Overdraft Paid Fees of $36 per account for items exceeding those amounts.
Most banks are willing to waive overdraft fees one or two times, so it is important to keep track of your transactions and avoid excessive fees when possible. Although being polite and persistent can help you get the fee waived, if overdrafts occur often then it may not be enough.
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